HAFA is a Joke

January 16, 2011 at 2:33 pm Leave a comment

by Maria Hass
The Home Affordable Foreclosure Alternative (HAFA) program launched by the federal government to expedite short sales is doing just the opposite – it prolongs the short sale.
I spoke to a HAFA counseling representative at Bank of America (BofA) recently, and he said it takes two to four weeks to find out if a the homeowner is approved for HAFA. During this time, if an offer comes in on the house, the offer sits until a decision is made on the homeowner’s HAFA qualification.
If approved, an appraisal is ordered prior to an offer. The appraisal value becomes the “pre-approved” price that the bank will take for the house. Is that good or bad? It depends on the market and the value. If the value is high, it will be difficult to find a buyer that will pay over prevailing market prices. In a declining market, the offer may not reflect the appraised value taken months earlier, resulting in an offer that will be rejected – or no offer at all.
The incentive to the seller is a $3,000 relocation check upon closing. But only a handful qualify for the program and a majority of these HAFA short sales do not close because of the terms and the long process.
The HAFA program, along with the other government housing programs like the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP) have been failures overall. It is difficult for people to qualify for the programs and lenders are not required to participate.
What else will the government come up with? I hope to see the day when Uncle Sam can create a program that will really help the people – and quickly.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate. Tags: , .

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